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The Great Divide - The new fat cats in Australia’s universities.

November 2016The Great Divide - The new fat cats in Australia’s universities.Richard Hil and Kristen Lyons

These days Australian universities look more like rapacious private firms than public institutions dedicated to the common good. Increasing private-sector investment in research, private ownership of research outcomes and protection through intellectual property laws, casualisation of labour, and managerial capture all point to what is now a commercially driven, corporatised system. As one senior University of Sydney manager remarked notably, universities are ‘more like sales operations than educational institutions’.

This mimicking of the business world is most apparent in income disparities, with the divide between the top earners—vice chancellors— and casual academic employees at a record level. These differences reflect a broader picture of casualisation and deepening socioeconomic inequality across most industrial sectors and wealthy nations, which, as many economists have noted, has become more marked over the past thirty years, resulting in the emergence of an enriched plutocracy and an entrenched precariat.

Universities are no exception to this new normal, with the nation’s forty vice chancellors earning up to ten times more than senior lecturers and vastly more than the estimated 67,000 (mostly female) casual academic employees who, importantly, undertake half of all undergraduate teaching. If we add other senior university managers (deputy vice chancellors, assistant deputy vice chancellors, provosts, pro vice chancellors, deans, assistant deans, operational managers, divisional heads and so on) and a bevy of ‘management consultants’ to the mix, the degree of income inequality is even more pronounced.

It is well known that since the early 1990s more and more highly paid administrators have been recruited by universities, while the number of teaching and research staff has declined and student numbers have gone through the roof. But the resulting work intensification has not led to commensurate salary increases for main-grade academic staff, who have seen their pay levels lag well behind those of university managers.

Such pay differentials have significant consequences, especially for those at the bottom of the salary scale. Research over many years demonstrates that widening pay gaps directly affect job satisfaction, happiness levels and health outcomes. Predictably, those on the lowest rungs are the most dissatisfied and unhappy of all. The fat cats on higher incomes are not necessarily in states of occupational bliss, but they are considerably richer, more job secure and guaranteed a comfortable retirement.

While the lower orders scratch around in precarious employment for what in many instances amounts to a subsistence wage, the privileges enjoyed by many senior managers border on the obscene. It is not unusual to hear of vice chancellors flying first class around the world and staying in high-end hotels, while at home benefiting from subsidised housing and generous superannuation and performance bonuses. Casual employees, on the other hand, are usually denied access to holiday and sick pay, career pathways and, more often than not, an office.

There are no such problems for Professor Peter Hoy, vice chancellor at the University of Queensland, who in 2015 was paid a whopping $200,000 performance bonus, nudging his base salary well over $1 million. Hoy, like his highly remunerated colleagues, earns more in a week than some casuals earn all year.

While the lower orders scratch around in precarious employment for what in many instances amounts toa subsistence wage, the privileges enjoyed by many senior managers border on the obscene.

The rationale for such bloated incomes is hard to fathom, particularly when you consider that Australian vice chancellors take home more than the current prime minister ($507,338) and heads of government departments, who have also experienced disproportionately high pay increases. Australian vice chancellors’ salaries also outstrip those received by many of their counterparts in Britain and the United States. Hoy, for instance, receives significantly more than the vice chancellor of Oxford University and vastly more than the majority of university presidents in the United States.

Overall, the average pay of vice chancellors exceeds that of most other professions. Though such comparisons are fraught with problems, consider a recent survey of national pay-scale data. As reported by The Sydney Morning Herald, university chiefs in 2015 received significantly more than chief executives, managing directors, surgeons, anaesthetists, financial dealers, psychiatrists, specialist physicians, dental practitioners, mining engineers, judicial and other legal professionals, finance managers and economists.

The rationale for such bloated incomes is hard to fathom, particularly when you consider that Australian vice chancellorstake home more than the current prime minister and heads of government departments.

In another jaw-dropping analysis, editor of The Australian’s Higher Education News Julie Hare reveals the full extent of recent payincreases. Hare found that the average salary of the nation’s university heads in 2015 was $873,571, an increase of $30,000 over the previous twelve months. The University of Sydney’s head, Professor Michael Spence, received $1,385,000 in 2015, up more than $220,000 on the previous year, and ‘on top of a $120,000 pay rise the year before’.

The biggest salary hike, however, was handed to outspoken advocate of fee deregulation Professor Greg Craven at the Australian Catholic University, who in 2015 received $1,335,000, which, as Hare points out, is ‘$200,000 more than in 2014 and represents an 80 per cent hike in his salary since 2010, when he was paid $739,000’. Craven’s salary now exceeds that of the University of Melbourne’s vice chancellor, Professor Glyn Davis, whose university stands atop the university rankings.

Tellingly, and in contrast to many of the professions mentioned above, the salary packages of university fat cats are not often open to detailed public scrutiny, particularly when it comes to key performance indicators, which, perhaps understandably, many institutions are reluctant to disclose. Despite such secrecy, it is glaringly obvious that our vice chancellors are being more than generously rewarded.

Evidence provided by the Australian Bureau of Statistics in 2015 indicates that national average wage increases were at their slowest since 1997, with the overall rise for 2014 standing at a paltry 2.6 per cent. Our university chiefs, on the other hand, have experienced double-digit pay increases, variously described as ‘ridiculous’, ‘excessive’ and ‘outrageous’.

The inequities associated with vice chancellors’ salaries are, however, not restricted simply to different levels of employment. Gender differentials are apparent too. Men fare much better than women in the salary stakes, reflecting the gender pay gap across other sectors. Women vice chancellors receive an average of $831,000, $42,000 less than their male counterparts. Only one woman vice chancellor (Professor Margaret Gardner at Monash University) earns more than $1 million, compared to nine men. And if this outlier is excluded from the figures, women earn on average $804,000—$70,000 less than their male counterparts for doing exactly the same job.

All this has occurred at the same time as every vice chancellor, bar one (Professor Stephen Parker at the University of Canberra), has gone out of their way to support the Coalition government’s recent attempts at fee deregulation, which would have further indebted the nation’s students, over 20 per cent of whom exist on incomes well below the poverty line. In a 2011 study by one of Australia’s leading public-health nutritionists, Roger Hughes and colleagues found that Australian students also experienced food insecurity and hunger at levels at least double that of the general population, figures that can only be expected to rise, alongside increased indebtedness and poverty.

This experience contrasts with that of the majority of senior university managers, who were enabled at the beginning of their careers by a free or low-cost university education. But you are unlikely to see vice chancellors blushing over such matters. They certainly don’t when they ‘rationalise’ their operations by cutting academic positions or call for restraint in enterprisebargaining negotiations. Lengthy disputes, strikes and protests over academic pay and cuts to staff numbers have been common across the sector as senior management have sought to ‘rationalise’ operations and minimise ‘costs’.

In responding to widening pay differentials in universities, including that between women and men, Jeannie Rea, president of the National Tertiary Education Union, has noted that, universities are surviving on overworked staff many of whom are on short-term and casual contracts…[and] with unpaid overtime and casuals working well beyond their paid time, the universities are dependent on unpaid labour. University staff will be rightly outraged by the continuing climb in senior management remuneration when we are told the universities cannot afford to employ and remunerate staff fairly.

The emphasis on financial concerns (especially revenue raising) is evidenced in the vice-chancellor job descriptions and selection criteria that appear occasionally in flashy online brochures. For example, in a recent pitch for a new vice chancellor at the ANU, it was noted that the successful candidate would exercise strong leadership aimed at achieving research and teaching ‘excellence’ but, importantly, would also have wide-ranging responsibilities to deliver ‘financial growth’. Indeed, the vice-chancellor salary boom appears to reflect a reward system based on the ability to generate income.

With this in mind, one of the key areas preoccupying vice chancellors is of course the international market. Regarded as a leading ‘export industry’, the market for international students now nets a staggering $17 billion per annum (exceeding revenue from tourism in many states). Given that international students pay up to three times more for the same courses as domestic students, it is little wonder that universities are seeking to enrol as many of these full-fee-paying students as possible. Revenue raising of this sort has enabled many universities to keep afloat, with Australia using student fees to subsidise research more than most other countries. Yet this trend is also occurring alongside increasing questions about diminishing educational standards and an over-reliance on the ‘cash cow’ of international embroilments.

The income differentials evident in universities are symptomatic of a system of neoliberal relations reflected more broadly across the range of industrial sectors and nation states. It is both timely and necessary to consider publicly whether current income disparities in higher education are warranted, and how we might create a fairer system of employment relations. At a minimum, income levels should be radically compressed, with the salaries of vice chancellors and senior administrators reined in, and the pay and employment conditions of those on the lower rungs made an urgent focus.